CTS Corporation Definition of Financial Term Adjusted Return on Invested Capital 2012 Operating earnings / (loss) $ 26.7 2011 $ 25.2 Full Year 2010 $ 27.8 2009 $ (17.8) 2008 $ 30.9 Charges (credits) to reported operating earnings: Restructuring and asset impairment charges Additional Legal Costs Gain on sale-leaseback Goodwill Impairment Additional CEO search, legal costs and acquisition Total adjustments to reported operating earnings Adjusted operating earnings $ * Tax rate 8.5 (10.3) 4.0 3.1 0.3 - 1.7 - 2.2 33.2 - 6.1 - 2.2 3.5 1.7 35.4 6.1 28.9 $ 25% * $ 21% * 22% * 20% * $ 247.5 50.4 (51.2) 246.7 $ 277.5 80.0 (44.6) 312.9 Prior Year: Shareholders' equity Long-term debt** Notes payable and current portion of LT debt Less: Cash Invested capital $ 263.3 74.4 (76.4) 261.3 $ 274.3 70.0 (73.3) 270.9 $ 247.5 50.4 (51.2) 246.7 $ 277.5 80.0 (44.6) 312.9 $ 326.4 68.3 1.0 (52.9) 342.8 Adjusted invested capital $ 254.7 $ 266.1 $ 258.8 $ 279.8 $ 327.9 $ 576.9 21.8 Sales Adjusted invested capital Invested capital turns (b) $ 576.9 254.7 2.26 $ 588.5 22.6 3.8% 3.8% $ 588.5 266.1 2.21 8.6% * For 2012, 2011, 2010, 2009 & 2008, Tax rates are Adjusted Effective Tax Rates ** 2012 debt was reduced by $63.5 million that was used to fund the D&R acquisition. 8.5% $ 552.6 23.0 4.2% $ 552.6 258.8 2.14 8.9% 14.1 12% * $ 274.3 70.0 (73.3) 270.9 8.9% $ 37.0 $ 263.3 74.4 (76.4) 261.3 Sales Tax effected adjusted operating earnings Tax effected adjusted operating margin as a percentage of sales (a) 23.0 $ $ 267.8 90.0 (109.6) 248.2 8.5% $ 17.6 Invested Capital: Current Year: Shareholders' equity Long-term debt Notes payable and current portion of LT debt Less: Cash Invested capital 8.6% 22.6 $ $ Adjusted return on invested capital (a) x (b) $ 29.5 Tax effected adjusted operating earnings Adjusted return on invested capital 21.8 28.7 5.0% $ 499.0 14.1 2.8% $ 499.0 279.8 1.78 5.0% $ 32.6 9.9% $ 691.7 32.6 4.7% $ 691.7 327.9 2.11 9.9%